A Low-Volume, High-Conviction, High-Support Investor
My friend Mark Mullen and his partner Jim Andelman are announcing a new VC firm in Southern California today. They call themselves Bonfire Ventures.
I love how they describe themselves as “a low-volume, high-conviction, high-support investor.” That is who you want at your side when you are starting a business. There are a number of those types of firms out there, USV is one, Bonfire is another, and there are plenty more. But there are also plenty of the other variety; high volume, low conviction, can’t get them on the phone when you need them investors. So finding a high conviction investor to lead your seed or Srs A round is ideal and we have one more VC firm like that now.
Bonfire is based in Southern California, one of the hottest venture capital regions right now, and is focused on “B2B” companies, a sector that Mark and Jim have focused on for the last decade.
I’d like to congratulate Mark and Jim on getting Bonfire off the ground and welcome them to the high conviction club. It’s a good group of VCs and we can always use a few more.
The marketing analogy is Shotgun vs. Riffle approach. Shotgun: reach many, hoping some stick.Riffle: reach fewer but with closer targeting.
To follow the metaphor, I am a riffle guy; almost to a fault by way of hyper-singular focus. I find myself getting anxious with having to keep track of everything that could be falling through the cracks when I shotgun. It gives me the willies just thinking about it.
Rifle works if you know what you are doing. But, just like there are different kinds of rifles, there are different approaches to lining up the shot. USV’s approach might be considered a rifle, since they take similar shots at every industry they invest in. WLV’s approach is industry centric but business model agnostic. Different rifle, different shot. Same approach.
thanks for elaborating well on my point.
Or going fishing with a big net vs. hunting with a spear.
Hilarious: “Hi mr. LP. Just throw your money onto the bonfire!” 🙂
Maybe what they had in mind was the bonhomie around a bonfire with investors+founders as “family”.https://uploads.disquscdn.c…
Not in southern california
Good one. You’re on fire today!
and you’re fired!
How Trumpian of you
There are few culturally accepted ways to brag about ones investment accompishments.Venture capital seems to fall into that, dare I say, Donald Trump, looked what I’ve done braggadocious style marketing. Has this always been the case?
In money management you are your track record.
This was more or less the pitch that got me my first big contact when I had no employees over Xerox Corp a story I have told here before a few times.And in a similar way I once convinced a group to hire attorney Derek Newman of http://www.newmanlaw.com/ even though his firm had blanket sued us and a bunch of other companies way back 2001  as a result of what I had even been quoted in the NYT as saying was an illegal lottery. When another legal issue a few years later came up the group wanted to hire some big massive name white shoe firm and my pitch was exactly what you are saying ‘this guy is small and this lawsuit will mean more for him and he will work harder he needs the win’. They did (hard to get by irrefutable and persuasive logic?) and we had a good outcome in the end and even saved money. http://www.nytimes.com/2001…
Great description.First thought – totally counterintuitive to the superficial description of VC; high volume (of meetings), low convictions (portfolio based investing) & no support.
Glad you’ve got the right kind of conviction…
“We have 20 founder CEOs that we backed in the past who have invested in the fund,” says Andelman. “A lot of them are coming to us as their investor of first choice when they’re doing their new thing.”I’ve been fortunate to work with Jim on a couple of companies over the past 4 years and know how refreshed CEOs have felt by his approach, so this does not surprise me at all.It’s encouraging to hear that other established VC’s like USV identify with this approach— having that support is critical in early stage business building, and makes it more enjoyable.
Please forward my name….I think I would like to join. Easy enough to Google me.
Q? How low is low volume for them
a lot of exists for a new firm. how’s that?so it’s a new firm, or a new brand for a new fund? I just do not get it’Internet We’.p.s. never use Google Voice as a 2FA.
why (re Google Voice)
cloning your phone/ switching your SIM – someone else receives the Voice call.
Sometimes, especially for entrepreneurs, it can be good to get some clear information on definitions, e.g., on seed stage.E.g., athttps://www.bonfirevc.com/b…isWe’re quite pleased with the composition and progress to date:- 7 of 9 are based in Southern California- 7 of 9 were Seed investments (Series Seed)- 7 of 9 were already generating revenue when we invested- We are lead or co-lead for 5 of the 9- Average Annualized Revenue when we invested was $1.025mm- Average Annualized Revenue today (despite short hold periods) is $2.56mm, a 350% CAGR So, seed stage is- Average Annualized Revenue … $1.025mm So, with the annual revenue of $1.025 million, a solo, sole founder might just conclude he had a good “lifestyle” business, decline an equity investment, and remain 100% owner with enough free cash for fairly rapid growth.So, it looks like the firm is not usually investing in sole, solo founders!Of course, athttps://www.bonfirevc.com/isWe invest with and support the talented founders who are building software solutions that redefine how business gets done Then the “are building” seems to conflict with the- Average Annualized Revenue … $1.025mm Also athttps://www.bonfirevc.com/b…is in partThese include The Trade Deck (IPO), Edgecast (acq. by Verizon), Burstly (acq. by Apple), Messagelabs (acq. by Symantec), Datapop (acq. by Criteo), Gradient X (acq. by Singtel), Orbitera (acq. by Google), Divshot (acq. by Google), Bitium (acq by Google), Lettuce (acq by Intuit), and many others. So, it looks like the firm has gotten most of its exits via acquihire M&A!So, sounds like they are in the acquihire business!Entrepreneurs can want to be clear on such issues!
This feel good story notwithstanding, USV is too small to survive. I predict within another five years, USV will either merge with another firm or shut down. The high tech VC Wild Wild West days are rapidly coming to close.
I know; I know; there was a big rush for social, mobile, local, sharing apps. And entrepreneurs will be coming up with 1000s of solutions that few people want very much for problems they mostly don’t care about.But giving up now based on that observation would be about like saying that when a horse drawn chariot hit 15 MPH there was no more future in ground transportation, when a sailing ship circumnavigated the planet there was no more future on the oceans, when iron replaced bronze there was no more future to metals, when burning coal replaced burning wood there was no more future to home heating, when a steam engine replaced horses for power there was no more future to power, …, when in 1900 a physicist said that the only future of physics was to add a few more decimal points of accuracy to the measurements of the fundamental constants.Instead, computing has a very long way to go, so does the Internet, and so do applications.More generally there is a lot of work to do, and we’d like computers to do it for us.More generally, we already know much of what people want in the famous one word answer “More”.More generally, we want a higher standard of living; that requires more productivity; and the most promising approach is the old theme that people should think and enjoy and computers and machines should work. But the computers and machines are not doing enough, and we need to get them to doing more from less effort from humans.For now, one of the main needs is just information, generating it and, then, finding it on demand. To be both a little more specific, that information needs to be on the Internet, and there we want more than just information — we want and want to find the Internet content.For more, we want computers to do better at more general cases of control, e.g., as in feasible planning, optimization in planning, and deterministic and stochastic optimal control.We need more, really a revolution, in computer security.We need more in computer system management and administration, an analogy with the classic human hierarchical organizations, humans managing computers managing computers, …, several level deep managing computers doing the work.It appears that such major progress needs to proceed broadly. We are getting progress broadly, but we would like it to be faster. Then with a lot more broad progress, there will be more opportunities for $500 billion companies.
we don’t know their internal forecasts. if the returns are good on a small model, why would they shut down?
I do sense that the VC industry is becoming ever more defensively aggressive. it sees a clear threat coming from over the horizon in the form of crowd sourced funding, which could eat its breakfast, lunch, dinner, and supper in one sitting.
So how many deals per year would lead a CEO to believe a VC is ‘low-volume’, 5-10, 10-15?
Also really like that they call out geography in their investment focus. Many VCs don’t or at best are vague.
This is big news in my little world. Deep respect for Rincon Venture Partners and probably a bit of nostalgia because they share a name with a favorite surf spot for my husband and surfer friends.If Bonfire continues the Rincon tradition, this is an tremendous development for the SoCal entrepreneurial ecosystem. But now I must investigate what is happening with Rincon partner John Greathouse, an amazing guy with an amazing name.
You can, just got my payout today. It is real